ATI Jet Lawsuit Alleges Hourly Service Plan Setbacks

After ATI Jet filed a complaint in April accusing Pratt & Whitney Canada (P&WC) of not honoring the terms of its Eagle Service Plan (ESP) engine maintenance contract—specifically alleging insufficient spare turbofans—the engine manufacturer is seeking to dismiss the case and move the litigation to Canada.

The complaint, amended on July 8, requests a jury trial to address P&WC’s failure “to deliver on those promised benefits” of its ESP “while knowing internally that its rental-engine pool was chronically insufficient to meet customer demand.”

ATI Jet operates a fleet of 24 P&WC PW305A-powered Bombardier Learjet 60s for wholesale charter services via its Jetvia brand. Under the lawsuit, ATI Jet is seeking at least $30 million in damages: the $25 million it spent on ESP since 2016; $2.5 million to cover ATI Jet’s purchase of spare engines to support its fleet; lost charter revenue due to grounded Learjets; and “other compensatory and consequential damages, exemplary damages based on ATI’s fraud allegations, and attorneys’ fees and interest.”

Meanwhile, ATI Jet wants a January 2025 settlement agreement it signed with P&WC rescinded, as well as termination of its ESP agreements. The settlement was accomplished with the previous owner of ATI Jet, before the June 2025 purchase of the company by Matthew O’Hayer, a longtime pilot and founder of Vital Farms and other companies.

The cost to P&WC, if the case comes to trial and it loses, could be significant but likely nowhere near the $1 billion-plus settlement that Honeywell paid to Flexjet for costs and delays related to Honeywell’s engine maintenance agreement.

In the ATI Jet complaint, the charter operator alleges it has internal P&WC information that “shows the company knew of significant engine shortages even as ATI was being told that rental engines simply were not available.

“ATI Jet further alleges that these representations induced it to enter into a January 2025 settlement agreement. ATI is now seeking, among other relief, rescission of that settlement, termination of its ESP agreements, recovery of damages, and exemplary damages based on alleged fraud.”

A key element of the ATI Jet complaint is that the company believes P&WC knew that it didn’t have enough rental engines—12 to support a fleet of 800 fielded engines—but kept collecting ESP fees and claiming that it was providing dependable engine support. “The industry standard calls for 4% to 8% of the installed fleet in rental support,” according to the complaint. “P&WC was providing barely 1%. P&WC knew this. P&WC chose to do nothing.

“ATI also alleges that P&WC’s internal interpretation of contractual language allowing rental engines to be supplied ‘if available’ effectively permitted P&WC to determine when an engine was considered available, even when replacement engines potentially could have been obtained.”

In one particular case, ATI Jet needed engines, and—on the same day that P&WC told ATI that no rental engines were available—a P&WC supplier, Aircraft Parts Solutions, had two engines ready to deliver for $2 million, according to O’Hayer. In the complaint, ATI Jet alleges that it has “internal P&WC communications in which a senior P&WC director allegedly expressed concern that providing rental-engine support to ATI could ‘set a precedent.’”

“We found out about this…the latter part of [last] year,” O’Hayer said. “We started getting bits and pieces. Then we started getting written documentation from other people. There were a lot of unhappy people at Pratt, and about the way this was done.”

ATI Jet alleges that “P&WC internally projected a continuing shortfall of approximately 16 to 32 engines during the 2024 [to] 2026 period.” In one case, one of ATI’s engines was out of service for 806 days. “ATI contends those internal projections are inconsistent with representations made to ATI that engine shortages were temporary market conditions outside P&WC’s control.”

The next step in the legal process is discovery proceedings, and ATI Jet has filed for depositions to be taken. “We’re going to be talking to a lot of Pratt & Whitney existing employees, former employees, vendors, and customers who are on the program with the same situation,” O’Hayer said.

Discovery is due by Feb. 26, 2027, and the trial is scheduled for July 30, 2027, unless a settlement forestalls further legal action.

According to ATI Jet, in court filings, “P&WC disputes ATI’s claims and has stated that, ‘if and when’ the merits are reached, it intends to contest them.”

Asked about the complaint, Pratt & Whitney Canada told AIN, “We do not comment on ongoing litigation.”